The war around the Budget 2021 warmed up again. The dispute now involves the bill PLN 4, in which the government recomposes almost R $ 20 billion in mandatory expenses that were cut by Congress to boost parliamentary amendments.
Ministries that counted on the amendments to make investments are now trying to use the project to recover their funds. The arguments are that the Economy was excessively conservative when estimating expenses with Social Security and welfare benefits for 2021, and that it would not be necessary to restore all the R $ 20 billion requested by Minister Paulo Guedes. There would be scope to free up at least R $ 3 billion for other portfolios, including Regional Development, which is at risk of paralyzing around 700 works and the construction of 250 thousand housing units due to lack of resources.
Some space in Social Security and assistance benefits could even come from the reduction in the number of beneficiaries due to the deaths caused by the pandemic. There would also be scope to reduce expenditure on closed insurance, a benefit paid to artisanal fishermen, where there is evidence of diversion of resources.
The economic team awaits an understanding between the Chamber and the Senate to resume tax reform along the lines defended by Guedes. The proposal that is being tied up with the mayor, Arthur Lira, would have five chapters, and the government should soon send to Congress one that deals with changes in the Income Tax. It includes dual VAT, the elimination of the IPI with the creation of a selective tax on products such as tobacco and alcoholic beverages, a restructuring of the Income Tax, with the end of exemptions on financial products and taxation of dividends, in addition to a renegotiation of tax debts. The problem is in the fifth chapter: the creation of a transaction tax. This matter is forbidden. For a while.
The government already considers it unlikely to have to extend the 2021 emergency aid for more than four months. The conditions for the creation of a boosted Bolsa Família are given, in which the benefits could rise to between R $ 280 and R $ 300. The resources for this would come from a break in the budget of the Bolsa itself, since families benefited by the program temporarily migrated to emergency aid. In 2022, the aid would come from the fact that the spending ceiling will have a higher adjustment due to the inflation that is used in its correction. This would give time to accommodate an enhanced social program.
The economic team remains excited about the performance of the labor market in 2021. There is already an expectation that the government may announce the creation of 1 million jobs in the first 4 months of the year. Until April, Caged showed the creation of 837,074 jobs. That would be proof that the economy is in full swing despite the pandemic.
The source of financing to launch the Productive Inclusion Bonus (BIP), a program that the Ministry of Finance wants to create to help insert young people into the labor market, is still under discussion. One possibility is that the money will come from the R $ 10 billion that the government has already allocated to BEM, a job preservation program. The other would be to come for another extraordinary credit.
Requests for cruelty
The tax reform report prepared by Deputy Aguinaldo Ribeiro was buried by Lira with cruelty refinements. The announcement – by Twitter – that the special commission would be extinguished while Ribeiro read his 110-page opinion was deliberate, to show that a new reform is now being debated. The evil is still a remnant of the election for the command of the Chamber of Deputies: Ribeiro was closed with Rodrigo Maia, who was defeated by Lira. The deputy’s report was also built on the basis of PEC 45, which was defended by Maia.
Anyone who thinks that Lira and Senate President Rodrigo Pacheco diverged in strategy is mistaken. Although Pacheco made a nod to Ribeiro declaring that it would be reasonable to give the commission an opportunity to complete the work, the Senate president also considered the rapporteur’s opinion as “the end”, and not necessarily his vote.